In brief: Exemption with right to deduction (WRD) means that no VAT is charged downstream, but the business retains the right to recover the VAT paid upstream on its purchases. This mechanism can generate a refundable VAT credit. To find out whether your transaction falls under this regime, use our VAT qualification tool. If you already have a credit, see our guide on VAT credit refund.
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Principle: the most favourable regime
Article 92 of the General Tax Code lists the transactions exempt from VAT with right to deduction. This is the most advantageous regime in the Moroccan VAT system.
In practice, a business benefiting from the WRD exemption:
- Does not charge VAT to its clients on the transactions concerned;
- Recovers the VAT borne upstream on its purchases of goods and services;
- Can accumulate a structural VAT credit, since it deducts without collecting;
- Can request a refund of this credit under the conditions set out in article 103 of the CGI.
This regime differs markedly from the exemption without right to deduction (art. 91), where the VAT paid to suppliers constitutes a definitive, non-recoverable cost. It also differs from out-of-scope transactions, which simply do not fall within the scope of VAT.
Article 92 is the most amended article of the CGI in VAT matters, with 38 amendments since Circular 717. The Finance Laws of 2024, 2025 and 2026 introduced significant additions.
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Category 1: Export and international
Export of goods (art. 92-I-1°)
Goods delivered for export are exempt with right to deduction. The exemption applies to the last sale carried out on Moroccan territory having the direct and immediate effect of achieving the export:
- FOB sale: delivery on board the vessel, subsequent costs and risks borne by the buyer;
- CIF sale: the seller handles loading, pays freight and insurance on behalf of the buyer;
- Export via commission agent: seller’s invoice to the commission agent, mandatory special register.
Required supporting documents: transport documents, customs slips and receipts.
Export of services (art. 92-I-1°)
Services intended to be exploited or used outside Moroccan territory are exempt WRD: studies, expertise, publishing, consulting, marketing, inspection of exported goods, transit, brokerage, warehousing.
Supporting documents: invoice in the name of the foreign client and proof of payment in foreign currency.
International transport (art. 92-I-35°)
Transport from or to abroad — by land, air or sea — is fully exempt, including the portion of the journey on Moroccan territory. The determining criterion is the existence of a single international transport contract.
Services related to international transport are also exempt: piloting, towing, mooring, handling (maritime); landing, parking, fuelling (air); maintenance, repair, storage (road). Commissions on international ticket sales received by travel agencies are exempt when borne by international transport companies.
Free export zones (art. 92-I-36°)
Goods delivered and services rendered to free export zones from the liable territory are exempt WRD. Free export zones are considered as non-liable territory.
Victualling of ships and aircraft
Victualling of ships and aircraft is treated as an export. Supplies to fishing boats in territorial waters and cabotage operations are excluded.
Tax refund for non-resident tourists (art. 92-I-39°)
Non-resident persons can obtain a refund of VAT on their retail purchases, subject to conditions: purchase of at least 2,000 MAD inclusive of tax, on the same day, from the same seller. The refund is made via the tax-free system (Global Blue or Morocco Tourist Refund), with a sales slip endorsed by customs before the 3rd month following the purchase.
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Category 2: Healthcare and pharmaceuticals
Pharmaceutical products — full exemption since 2024 (art. 92-I-19°)
This is one of the most important reforms of the FL 2024. Since 01/01/2024, all pharmaceutical products are exempt from VAT with right to deduction, both domestically and at import (CN 735).
Before 2024, only certain specific medicines benefited from this exemption (anti-cancer drugs, hepatitis B/C antivirals, vaccines, medicines > 588 MAD, etc.). The exemption is now comprehensive, provided the products:
- Comply with the legislative and regulatory standards in force;
- Are used in medicine for curative or preventive purposes (human or animal);
- Are sold exclusively in pharmacies or by authorised persons.
Excluded: parapharmaceutical products remain taxable. Raw materials and pharmaceutical inputs are subject to the standard rate of 20%.
The VAT credit arising from 01/01/2024 in respect of sales of WRD-exempt pharmaceutical products entitles the holder to a refund (art. 103-1°).
Blood and its derivatives — added by FL 2026 (art. 92-I-19° and 123-37°)
From 01/01/2026, blood and its derivatives complying with standards in force, used in medicine for curative or preventive purposes, are exempt WRD both domestically and at import (CN 737).
Haemodialysis products and equipment (art. 92-I-18°)
The following are exempt WRD: dialysers, haemodialysis and haemofiltration generators, venous and arterial lines, needles, connectors, catheters (all brands since FL 2024), dialysis bags, concentrates and solutes.
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Category 3: Agriculture
Fertilisers (art. 92-I-3°)
Fertilisers of mineral, chemical, vegetable or animal origin are exempt WRD. This includes natural fertilisers, nitrogen, phosphate and potassium products, manufacturing waste and compost. Fertiliser-antiparasitic mixtures are exempt if fertilisers predominate (> 50%).
Fertilising materials and growing media — added by FL 2026 (art. 92-I-3° and 123-13°)
Since 01/01/2026, the exemption is extended to fertilising materials and growing media for agricultural use (CN 737), as defined by law no. 53-18:
- Fertilising material: substance, mixture or micro-organism intended to provide plants with nutritional elements or to improve their nutritional efficiency;
- Growing medium: material serving as a growing medium for plants, enabling anchoring and contact with nutritive solutions.
Import under exemption requires an electronic application, a pro forma invoice, a descriptive statement and a commitment to exclusively agricultural use.
Agricultural equipment and products (art. 92-I-5°)
The exhaustive list of exempt equipment includes: phytosanitary products, tractors, greenhouse shelters, motor pumps, seeders, combine harvesters, milking equipment, honey extractors, drip micro-irrigation equipment, sprinkler irrigation equipment and water retention polymers. The exemption for micro-irrigation equipment is limited to farmers with specific formalities (CN 730).
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Category 4: Investment
Capital goods — 36 months (art. 92-I-6°)
Capital goods recorded in a fixed asset account, acquired by taxable businesses, are exempt from VAT for 36 months from the start of activity.
Start of activity:
- Without construction: date of the first commercial act (excluding incorporation costs and initial installation costs, for which a 3-month period is provided);
- With construction: date of the building permit.
Conditions: depreciable assets, held for 5 years following their acquisition, allocated to transactions subject to VAT or exempt under articles 92 or 94.
Mandatory guarantees since 2024 (CN 735): exemption applications must be accompanied by a bank guarantee, pledge of public contract, mortgage assignment or any other form of guarantee accepted by the administration. Exception: agreements concluded with the State.
24-month extension — FL 2026 (CN 737): the additional period is now aligned to 24 months (instead of renewable 6 months) for businesses constructing their projects or carrying out investment projects under a State agreement. The application must be filed before the expiry of the initial 36-month period, accompanied by a progress report on works and an indicative list of assets remaining to be acquired.
Private education and vocational training (art. 92-I-8°)
Equipment recorded as fixed assets, acquired by private educational or vocational training institutions, is exempt WRD. Vehicles are excluded, except those intended for collective school transport.
Since FL 2025 (CN 736), the exemption is extended to equipment acquired by real estate companies or OPCIs created exclusively for the construction of educational or vocational training institutions. Mandatory holding period: 60 months (movable assets), 10 years (immovable assets).
Vocational training graduates (art. 92-I-9°)
Equipment, tools and materials acquired by vocational training graduates are exempt for 24 months from the start of activity. Same formalities as standard capital goods.
Coaches and trucks — international road transport (art. 92-I-7°)
Coaches, trucks and equipment intended for international road transport are exempt under the same conditions as article 92-I-6°.
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Category 5: Housing and real estate
Social housing (art. 92-I-28° and art. 93)
Social housing benefits from a specific WRD exemption mechanism. The State pays to the buyer, via the notary, the amount of VAT levied on the acquisition.
Social housing criteria (since FL 2010):
- Covered area: 50 to 100 m² (gross, including common areas at a minimum of 10%);
- Sale price: ≤ 250,000 MAD excl. VAT;
- Use: primary residence.
Formalities: compromise and final contract must be notarised, certificate of non-liability for property income tax, first or second mortgage in favour of the State, allocation to primary residence for 4 years, final contract within 30 days of the VAT payment.
University halls, residences and campuses (art. 92-I-29°)
Construction work carried out by property developers is exempt for 3 years from the building permit, for buildings of at least 50 rooms (maximum 2 beds per room), under a State agreement.
Mosque construction (art. 92-I-43°)
The exemption takes the form of a restitution of 50% of the total VAT borne. Authorisation from the Ministry of Habous is required.
Restoration of historic monuments (art. 92-I-32°)
Restitution of VAT paid on purchases of materials, works or services related to the restoration of classified historic monuments.
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Category 6: Maritime and fisheries
Sea vessels (art. 92-I-33° and 34°)
The following are exempt WRD:
- Sale of sea vessels: transport ships, tugboats, pilot boats and lifeboats, fishing vessels, national navy, tourist excursion boats;
- Repair and transformation, including subcontracting;
- Incorporated products: rigging, armament, woodwork, on-board instruments, equipment.
Excluded: oyster and mussel farming vessels, hydrofoils, pedal boats, inflatable dinghies, sports boats, pleasure boats.
Fishing gear and nets (art. 92-I-3°)
All instruments and products used to attract, bait, catch or preserve fish are exempt: nets, hooks, trawls, ice, salt, etc. The supplier must have a purchase order endorsed by the maritime district and keep a special register. The list was updated by FL 2024 (CN 735).
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Category 7: Organisations and donations
Bank Al-Maghrib operations (art. 92-I-26°)
The following are exempt WRD: operations relating to monetary issuance, manufacture of banknotes, coins and security products, services rendered to the State and non-profit activities within the scope of its legal missions.
Donations (art. 92-I-20° to 23°)
The exemption covers goods, merchandise, works and services delivered as donations:
- (I-20°) By natural or legal persons to the State, local authorities, public institutions or associations recognised as being of public utility;
- (I-21°) Within the framework of international cooperation by foreign governments or international organisations;
- (I-22°) By the Moroccan government to foreign governments;
- (I-23°) Financed by European Union donations.
Associations and foundations
Several entities benefit from specific WRD exemptions on their acquisitions: associations for disabled persons (I-12°), Al Akhawayn University (I-11°), Red Crescent (I-13°), Mohammed VI Foundation (I-14° and FL 2024 addition for the Mohammed VI Foundation for Sciences and Health), Hassan II Foundation for the Fight against Cancer (I-15°), National League for Cardiovascular Diseases (I-16°), Islamic Development Bank (I-24°), Bayt Mal Al Qods Agency (I-25°), Tangier Mediterranean Agency (I-37°).
Bodies affiliated with CNOM — added by FL 2025 (art. 92-I-56°)
Since 01/01/2025, goods, equipment, merchandise and services acquired by bodies affiliated with the National Council of the Order of Physicians are exempt WRD (CN 736).
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Recent amendments: FL 2024, 2025 and 2026
Finance Law 2024 (CN 735)
- Pharmaceutical products: comprehensive WRD exemption from 01/01/2024 (art. 92-I-19°);
- Military equipment and materials: new article 92-I-52° covering vehicles, weapons, ammunition and maintenance services acquired by national defence and security bodies;
- Mohammed VI Foundation for Sciences and Health: exemption of acquisitions in line with its missions;
- Capital goods: obligation to provide sufficient guarantees;
- Haemodialysis catheters: removal of reference to a specific brand.
Finance Law 2025 (CN 736)
- OPCIs and real estate companies for education: extension of equipment exemption to structures dedicated to the construction of educational institutions;
- Bodies affiliated with CNOM: new WRD exemption (art. 92-I-56°).
Finance Law 2026 (CN 737)
- Blood and its derivatives: WRD exemption domestically and at import (art. 92-I-19° and 123-37°);
- Fertilising materials and growing media: extension of the agricultural exemption (art. 92-I-3° and 123-13°);
- Harmonised 24-month extension: for investment projects with a State agreement, replacing the renewable 6-month period;
- Bovines and camelids: temporary import exemption (300,000 head of cattle, 10,000 head of camelids) from 01/01/2026 to 31/12/2026 (art. 247-XXXXV).
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Suspensive regime (art. 94): an alternative for exporters
The suspensive regime provided for in article 94 of the CGI is not strictly speaking an exemption. It allows exporting businesses to purchase under VAT suspension — i.e. without paying tax upstream — within the limit of the previous year’s export turnover. VAT becomes chargeable if the conditions are not met.
This regime covers goods, raw materials, non-recoverable packaging and services necessary for export. The business must be categorised (DGI certificate), in regular tax standing, and keep regular accounts with a materials ledger.
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Reference texts
- General Tax Code 2026 — Articles 92, 93, 94, 99, 103, 123
- Circular Note No. 717 — Volume 2 (VAT and registration duties)
- Circular Note No. 730 (FL 2020) — Micro-irrigation equipment
- Circular Note No. 735 (FL 2024) — Pharmaceutical products, military equipment, capital goods guarantees
- Circular Note No. 736 (FL 2025) — OPCIs for education, CNOM bodies
- Circular Note No. 737 (FL 2026) — Blood and derivatives, fertilising materials, 24-month extension
TOOLS
VAT Qualification Morocco 2026 — Free tool: Determine in just a few clicks whether your transaction is outside scope, exempt or taxable, and at what rate. Compliant with the 2026 CGI.
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FAQ
What is the difference between exemption with and without right to deduction?
Exemption with right to deduction (art. 92) allows the business to recover the VAT paid to its suppliers, even though it does not charge VAT to its clients. Exemption without right to deduction (art. 91) does not allow this recovery: the input VAT becomes a definitive cost. This is why the WRD exemption is considered the most favourable regime.
How can an exporter recover VAT?
The exporter benefits from the WRD exemption under article 92-I-1°. The VAT paid on purchases generates a structural VAT credit. This credit is fully refundable under the conditions of article 103-1° of the CGI. The exporter can also opt for the suspensive regime (art. 94) to purchase directly free of VAT. See our guide on VAT credit refund.
Are medicines still exempt from VAT in Morocco?
Yes. Since 01/01/2024, all pharmaceutical products complying with standards in force are exempt from VAT with right to deduction (art. 92-I-19°). Parapharmaceutical products are excluded and remain taxable at the standard rate of 20%. Raw materials and pharmaceutical inputs are also subject to the 20% rate.
What is the duration of the exemption for capital goods?
The capital goods exemption provided for in article 92-I-6° applies for 36 months from the start of activity. Since FL 2026, a 24-month extension is possible for businesses carrying out projects under a State agreement. The extension application must be filed before the expiry of the initial 36-month period.
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